§ 9. Mr. Patrick Jenkinasked the President of the Board of Trade if he will give an up-to-date estimate of the percentage decline in industrial investment, excluding investment in mineral oil refining, in 1967 compared with 1966.
§ 27. Mr. Biffenasked the President of the Board of Trade what proposals he has for revising the expectations of future levels of industrial investment; and if he will make a statement.
§ Sir C. Osborneasked the President of the Board of Trade what revision he now proposes to make in his estimate of 7 per cent. to 8 per cent. fall in capital investment next year, in view of the industrial production index fall from 138 to 133.
§ Mr. JayWith permission, I will answer Questions No. 9 and No. 27, and Question No. 6 for Written Answer together.
At the end of September, manufacturers' plans suggested a fall between 1966 and 1967 of 11 per cent., if investment by mineral oil refiners is excluded, and 7 per cent. or 8 per cent., if oil refining is included. I would not wish to amend this estimate because of short term fluctuations in the index of production. In January, a new estimate will be made from forecasts currently being collected.
§ Mr. JenkinWhatever the shortcomings of the form of estimating, does the President of the Board of Trade not regard this as a very disturbing trend, on any view? Does he not recognise that the only really effective incentive to industrialists to invest is that they should see a prospect of making a profit thereby? Can he not recognise that there will be no prospect of getting investment until Government policy is changed?
§ Mr. JayThese estimates were made before the increases in investment grants which I announced last week. The hon. Gentleman constantly overlooks that, at the same time, as this temporary fall in private investment occurs, public investment will increase substantially next year.
§ Mr. BiffenWill the right hon. Gentleman bear in mind, that the bulk of our exports come from the private sector and that increases in the nationalised industries' investment will not necessarily compensate in that respect. Would he comment on this? Surely the prospective decline of 11 per cent. is calamitous compared with the prospective increases which were contained within the National Plan? Would he bear in mind the desirability of a cut in the rate of company taxation as a means of restoring business confidence?
§ Mr. JayIt is precisely for that reason that we have confined the investment grant to the manufacturing sector, which is by far our biggest exporting section of the economy, and confined it to private and not public enterprise.
§ Sir C. OsborneRegarding the Question which I had down for Written Answer, where the Government have shown that the industrial production index has fallen from 138 to 133, does the President of the Board of Trade really think that private industrialists will go in for greater expansion with figures like that in front of them? What can he do to help this other figure?
§ Mr. JayThere are many factors which influence private investment. I agree with the hon. Gentleman that the prospect of a market is one important factor. But the immediate influence which we can bring to bear is the help by means of the investment grants.
§ Mr. BarberWhat effect will this very great decline in industrial investment have upon the forecasts in the National Plan?
§ Mr. JayIt is not a very great decline. Private investment, which was running at a high level this year, has temporarily declined by a small amount, which I agree with the right hon. Gentleman is unfortunate. We hope that that will be reversed as a result of the action which we have taken. In any case, it is offset by the increase in public investment.
§ Mr. BarberI asked the right hon. Gentleman what effect it would have on the National Plan forecasts.
§ Sir Harmar NichollsOn a point of order, Mr. Speaker. Is it not an innovation, and, at first sight, not necessarily for the better, for a Question down for Written Answer to be included in the oral replies?
§ Mr. SpeakerI did not get the hon. Gentleman's question.
§ Sir Harmar NichollsIs it an innovation which has been approved by the procedure of the House for a Written Question to be answered orally on the Floor of the House?
§ Mr. SpeakerIt is not an innovation. It has happened before.